South Africa Gets the Green Signal for New AML/CTF Laws

South Africa has finally gotten a green signal for new finance laws to address shortcomings identified by FATF in the country’s ability to tackle money laundering and terrorism financing activities. 

Finance Minister Enoch Godongwana has welcomed General Laws (Anti-Money Laundering and Combating Terrorism Financing) Amendment Bill passed by the National Council of Provinces (NCOP).

Speaking to the NCOP, Godongwana noted that the development represented a significant turning point in South Africa’s efforts to address the risks of being placed on a “gray list,” as well as shortcomings in the country’s ability to combat money laundering and terrorism financing as identified by the Financial Action Task Force (FATF).

“By passing General Laws (Anti-Money Laundering and Combating Terrorism Financing) Amendment Bill, this house demonstrates its commitment to not only address the issues which risk the graylisting by FATF but more importantly, this governments’ commitment to rooting out and preventing financial crime and the proceeds of corruption,” Godongwana said.

To address the technical compliance issues raised by the FATF in its Mutual Evaluation Report, the Bill modifies five pieces of legislation. 

The Amendment Bill, according to the Minister, fixes 14 of the 20 recommendations, along with a proper enhancement of the practices and powers of regulatory bodies. He said: “In parallel, the Protection of Constitutional Democracy against Terrorist and Related Activities Amendment Bill, 2022 (administered by the Minister of Police) is currently before Parliament, and I hope it will be passed soon. The Protection of Constitutional Democracy against Terrorist and Related Activities Amendment Bill, 2022, deals with two further (and core) Recommendations. The outstanding four deficient recommendations are being addressed via policy processes and mechanisms.”

Godongwana stated that the NCOP and the Select Committee on Finance in the NCOP would assess the Bill if the National Assembly approves it with the suggested revisions.

“In addition to the laws we are passing, the country is also working to improve the effectiveness of the country’s AML/CFT system. This represents the second half of the exam we must pass. This relates to how the country’s AML/CFT laws are implemented and how effective the country’s systems are in combatting financial crime,” Enoch Godongwana said.

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